Policy and regulation

Open access satellite radio

Submitted by acohill on Mon, 02/19/2007 - 10:48

The impending merger of XM and Sirius satellite radio providers is a good example of why open access networks make sense. Sirius and XM have not grown as expected, largely because the two companies provide redundant and duplicative systems. Nobody cares about which satellite a radio station comes from, and people particularly do not care to spend hundreds of dollars on special radios that only work with one provider. If we were doing this with TV, we'd all have to buy one TV to watch NBC, and another TV to watch CBS.

That's the current satellite radio model. It is also the current broadband model. Want to use Verizon's VoIP telephone service on your Comcast cable modem? Good luck. You have to switch to Verizon broadband, install different equipment, and pay different rates before you can even talk about getting what you want, which is dial tone.

The correct business model for XM and Sirius is to merge, and then sell channel access to the highest bidder, on a level playing field. In other words, the merged Sirius/XM becomes a neutral carrier for hundreds of channels of music, news, and entertainment, and the business model is to make a small amount of revenue share on each channel. With a little tweak to the radios we buy to get this entertainment, we could buy on a per channel basis instead of getting 150 channels when we really only listen to 4 or 5 on a regular basis. Bundling content (the radio channels) with the infrastructure (the satellites) is a Manufacturing Economy business model. There are better ways to make money while simultaneously giving buyers of content (us) more choice.

The same is true of broadband. Communities should build a single integrated digital road system that any service provider can use to deliver goods and services. Done right, telecom costs will go down while everyone selling services will make more money. And the community will also share in the revenue for providing the transport system, just like Sirius/XM should do.

Phone deregulation in Virginia

Submitted by acohill on Thu, 01/18/2007 - 07:35

Verizon wants to be deregulated in Virginia for phone service. The company asserts that there is ample competition and that the company should no longer be forced to charge set prices for certain services.

What struck me was the note in the article that the company submitted 2,400 pages of "documentation" to prove its case. If the situation is as obvious as the company asserts, why so much paper? The article leaves some questions unresolved. For example, some phone users get service from a third party like AT&T but that service comes in over Verizon lines. My guess is that in its request, Verizon is counting AT&T as a competitor, but if deregulation occurs, Verizon could raise the rates on its wholesale access to the point that it is no longer profitable for companies like AT&T to do business. This is exactly what happened when price controls were lifted for DSL; across the country, virtually all the third party DSL providers, who had really created the market when the phone companies avoided it, went out of business, leaving the field to the incumbents.

Should Verizon be unleashed? It is likely to be a painful pill in the short term, but partial regulation (of some companies and not others) creates market irregularities that keep communities chained to old technology. In the long term, the best answer is open service provider networks that let any company use the community's digital roads to sell goods and services (and no, the government won't be competing with the private sector). Verizon, among others, could use those community digital roads to keep existing customers and to attract new ones. And prices would go down across the board.

50% tax rate on business telecom

Submitted by acohill on Wed, 12/27/2006 - 10:52

One big change in the switch to an all IP-based telecommunications system is that businesses may see lower taxes. Franchise fees, carrier line assessments, subscriber line charges, and other state and local telecom taxes often add up to nearly 50% of the cost of a business telephone line. Most or all of those charges disappear when a business switches to VoIP. Local and state governments may not like that, but over-taxing businesses just makes local businesses less competitive in a world economy (it is not accident that Asia is roaring ahead economically--business taxes in high growth Asian countries are usually much lower than in the U.S.).

High business taxes on essentials like phone service simply leave businesses with less money for new jobs and business expansion. Government can't have it both ways: high taxes on businesses and good economic growth.

But community broadband does not mean local governments have to give up revenue from telecom. Just the opposite is true. By designing a fairly structured open service provider network, more telecom users pay for the cost of right of way and community infrastructure, and the cost of providing the network (and some fair return to a government's general fund) is more evenly applied across the community, with a lower burden for businesses. As a bonus, the open competition of an OSPN community system tends to lower telecom costs for business.

With an open service provider network, everyone wins. Businesses get more and better telecom services at lower costs while paying lower taxes, citizens and local government pays less for telecom, and local government actually gets more revenue than it would with the crazy patchwork set of taxes and franchise fees in use now.

Sound interesting? Call us to talk about doing a financial engineering study of how your local government would benefit financially from an OSPN community broadband system.

Ruled by idiots

Submitted by acohill on Mon, 11/20/2006 - 09:17

In one of the most disheartening and discouraging articles I have read in a long time, Robert Cresanti, the Undersecretary of Commerce for Technology, says, essentially, that Americans are stupid and that we need to import more foreign engineers and scientists.

He apparently visited China recently, and came away so impressed that he has unilaterally surrendered the U.S. economy to China. This man ought to be fired on the spot. Instead of drafting a plan to increase U.S. investments in science and engineering, his approach is to give up and hire more Chinese.

I have a little more faith in America and American workers than that, and it is a tragedy that this guy gets paid with our tax dollars.

Image spam driving everyone crazy

Submitted by acohill on Tue, 11/14/2006 - 10:06

NetworkWorld reports that spam traffic has jumped substantially in the past month or two. Fueling the deluge of junk mail are two changes in the spam ecosphere. Spammers are using two new zombie programs that infect Windows computers, making ordinary desktop computers into spam machines that can send out hundreds of thousands of spam emails per day. Often, people don't even know their machine has been infected; the only hint that something may be wrong is sluggish performance.

The second thing driving the new levels of spam is "image spam," which replaces text with GIF and JPEG images. Very few junk mail filters are able to detect that an email with just an image in it is spam, so spammers are both sending out more of that kind of spam, but we are seeing more of it in our IN boxes because our email filters and firewalls can't detect it. There is some work being done to use image processing software to identify and detect image spam, but it will take some time to get the software working well enough to deploy.

Ultimately, I see no solution other than to charge a fee for email. The problem with spam is that there is virtually no cost to send it. In essence, the cost of delivery is paid by the receiver, rather than the sender. If we had a micropayment system in place where it cost, for example, 1/100th of a cent to send a piece of email, it would cost most people and businesses almost nothing, but spammers sending millions of emails per day could no longer afford to do it.

Cisco patents the triple play

Submitted by acohill on Wed, 10/18/2006 - 08:07

If you needed proof that the US Patent and Trade Office (USPTO) has problems, look no further. The USPTO just granted Cisco a patent on the triple play, which means delivering voice, video, and data to the home. Cisco does not have much a presence in the Fiber To The Home (FTTH) market because their gear is designed for corporate and institutional networks, and is not really the first or even second choice for community broadband systems.

Like a lot of companies, Cisco has apparently decided if they can't innovate, they can at least sue. The notion of "triple play" is so common that it is laughable to think it could be patented, but we're talking the Federal government here, in a perfect illustration of why you really don't want Federal bureaucrats helping too much with local broadband. You would likely end up with some Federal agency defining broadband as 256 kilobits, or about one one-thousandth of what other countries view as acceptable. Oh, wait, that is what we have--it is the FCC's definition of broadband.

Anyway, I digress. This patent is likely to be challenged early and often. There are numerous other companies that have been working in this field, and Cisco's only (weak) claim to the patent is that they filed it in 2000, before there were too many products on the market that actually implemented this.

Communities need to deal with broadband locally. The Federal government simply does not have the cash to rebuild the entire telecommunications infrastructure of the United States over the next ten years, so waiting for the Feds is an exercise in futility. But there is some good news: there is plenty of money to rebuild local telecom infrastructure. You just have to know where it is. And no, it is not at the state or Federal level.

More top level domains not an improvement

Submitted by acohill on Mon, 09/25/2006 - 08:48

Demonstrating that the big telecom companies have not learned much over the past decade, they have successfully gotten a new top level domain called 'mobi,' as in cingular.mobi. In theory, this is supposed to make it easier for people to find content customized for cellphones, but this is a non-problem. It is straightforward now to design Web sites for cellphones, and you don't need a new domain to do it--there is no value add here.

All this is is a clumsy attempt to create more walled gardens for content, and of course, in a walled garden, there is a gatekeeper collecting fees. From a user perspective, it makes things worse, as you now have to make an extra decision....do you go to cingular.com to find what you are looking for, or do you have to search on cingular.mobi? Since it is very expensive to duplicate the content of Web sites, most companies using the mobi domain won't keep everything on their 'normal' site and the mobi site, so you may have to check in both places. Which takes time--make that *wastes* time and will irritate everyone.

The telecoms are still pursuing a 1950s era business model of "owning the customer," and they continue to try to do so in the Knowledge Economy, where you can't "own" the customer anymore. Every scheme to try to create special content for cellphones has failed...remember WAP? Neither does anyone else, because it was a complete failure.

A blog too far

Submitted by acohill on Mon, 09/18/2006 - 06:47

The media has numerous stories on the Maryland campaign aide who was fired for blogging on the job. The young woman's remarks, aside from being insensitive and rude, are incredibly naive. Not only was she making inappropriate remarks about her boss' opponent, she was also making inappropriate remarks about her boss' own associates--she was writing negative comments about her own boss.

So we have a perfect illustration of a blog gone too far. Regrettably, we have people today who think they have a right to blog about anything that strikes their fancy, but blogging is not a right, it is an opportunity. So we can formulate a simple rule.
Don't blog the hand that feeds you.

I hope this campaign aide is not surprised that she was fired, but somehow, I doubt it. Businesses need to add a policy on blogging to the company handbook, and it could be just one word, "Don't," as in "Don't blog about the company you work for or the people you work for or with, period. Doing so will be grounds for dismissal."

Competition works

Submitted by acohill on Mon, 08/28/2006 - 07:42

This CNet article describes how telephone and cable companies are responding to competition with better customer service. As cable companies roll out voice services and telephone companies are slowly rolling out TV service, we are getting a glimpse of what happens when these companies have to worry about keeping their customers--they treat them better.

But a duopoly also tends to lead to cartel-like pricing, where service may be slightly better but you don't see much movement in prices. With just two firms, there is little reason for either firm to cut prices very much or to try to do things differently. That is one reason why you see a lot of low ball "introductory pricing" for DSL and cable modem services, but never see any permanent price cuts. The phone companies still have a much smaller broadband marketshare, so DSL tends to be about $10 cheaper than cable modem service in most markets--consumers won't bother to switch at all if the savings are less than that.

But prices for all services--voice, video, and data--could be much less expensive if all those services were carried over an Open Service Provider Network (OSPN) using an Open Service Architecture (OSA) system. Then and only then do things really get interesting, because now instead of two providers for a service, you are much more likely to have four or more, making cartel pricing much more difficult.

The future of broadband is Open Service Provider Networks. They work--you get more services at much lower cost. The OSPN concept started in Europe, but once we get a couple of communities in the U.S. with OSPN systems, it will be hard to imagine doing it any other way. Oh, and one more thing.....OSPN networks make communitywide broadband systems financially viable over the long term. Design Nine is the only broadband architecture firm in the U.S. that specializes in the design and implementation of OSPN systems; call us if you want help with your community fiber and wireless projects.

Public safety project has to fight Verizon

Submitted by acohill on Thu, 08/17/2006 - 08:46

A consortium of communities in Michigan figured out that building their own fiber network would save them millions in taxpayer funds, but if you read the article, you get the distinct impression that Verizon believes the purpose of government is to ensure that Verizon never has any competition.

Apparently, Verizon believes government should never try to save money and never try to do things differently if there is any impact on Verizon's bottom line.

The clue that something is amiss is the huge costs savings the local governments gain from building an entirely new network--an expensive undertaking. Verizon, in many areas of the country, has chosen not to invest in new infrastructure, effectively forcing communities and businesses to continue to pay high prices for old, 19th century copper technology.

Done right, community fiber systems can not only save taxpayer dollars but also be a huge boon for businesses, who could get access to less expensive voice and data services from competitive providers.

In the studies that Design Nine has been doing for communities, when you look at the forty year expected life of fiber, the multi-million dollar cost of a fiber system is a fraction (typically less than 5%) of what business and government will pay for telecom over that same time period. And it's a lot less expensive than water and sewer projects, which communities build and manage routinely.

Who do you want deciding the economic future of your community? You, or Verizon?

Two tier Internet: We know what happens

Submitted by acohill on Wed, 07/26/2006 - 09:39

We know exactly what will happen if the big telecom companies succeed in convincing Congress to let them partition the Internet. We have a perfectly good example of the mess we will be in, and it is called the cellphone industry. Read this article [link no longer available] to see how innovation is choked off, small businesses are forced out of the market place, and how consumers end up paying more, much more, for mediocre services.

Right now, anyone with a good idea can start an Internet-based business and know that the service will be available to anyone with an Internet connection. What the telecom companies want is a "two tier" system, but in reality there will be many tiers, and companies that want to sell a service over a Verizon network, as an example, will likely have to pay high up front fees and high monthly fees, before any revenue comes back to the new enterprise. This means most new business ideas will never launch, because the start up costs will be too high, and the next Google or eBay will never have a chance. Let's hope Congress comes to its senses before it is too late.

Friends and enemies: Google and the telcos

Submitted by acohill on Thu, 07/06/2006 - 09:33

Regular readers know that I am often no fan of Google, but this article suggests Google may be the best friend we have as the telecom wars heat up. With Congress determined to pass the best laws that the big telecom firms can buy, Google (and Microsoft, if it wants to take sides) is a firm with pockets deep enough to go eyeball to eyeball with the cable and phone companies over net neutrality and the two tier Internet.

Net neutrality does not "limit" providers

Submitted by acohill on Tue, 05/09/2006 - 13:26

This article talks about Verizon's new claim that net neutrality "limits" the company, and the nothing but a scare tactic of claiming they won't be able to roll out any new services unless they get to erect toll gates.

One thing net neutrality does limit is the ability of one or two big companies from setting up walled gardens that keep consumers locked into a few choices (from, say, Verizon or Comcast). Net neutrality gives consumers and innovative startups a chance to play on a level playing field.

The telcos are way behind the cable companies in broadband customers, and they are desperately trying to get legislators to give them a break. They have cleverly adopted language that makes them sound like they are all for innovation and rolling out new services quickly, but you have to look beyond that to see what the end game is likely to be.

Right now, the picture could get very grim very quickly if legislators fall for all this "We just want to offer great new stuff at great prices." In the short term, we do get some modest competition. But in the long term, communities, their economic future, and local jobs are at stake if all we have is a duopoly with cartel-like pricing and a very limited set of choices for services. A duopoly is not marketplace competition. Vasteras, Sweden has marketplace competition, with 64 service providers selling all kinds of services to local residents and businesses. That's what every community in America ought to have--dozens of providers, not just two.

Save the Internet

Submitted by acohill on Tue, 04/25/2006 - 06:11

A distinguished group of technology leaders has begun a Save the Internet campaign, which is intended to provide information to legislators on the network neutrality issue.

Many of the incumbent broadband providers want to start charging differential fees for access to their broadband networks. The effect will be to squeeze much of the innovation and opportunity out of the Internet, leaving only deep pocket companies that can afford to pay the tolls--and that is all they really are.

It's as if our entire Interstate Highway System, formerly free, suddenly had tollbooths at every exit. It would not be good for the economy. And a two tier Internet won't be good for the economy or for communities.

Communities need a stake in the ownership of the Internet; nothing less than their economic future is at stake. If the toll access to the Internet is too high in your community (think rural), companies won't relocate to rural areas. And that means no jobs.

There is ample precedent for communities to take on partial ownership of telecom infrastructure; done correctly, private telecom providers can make even more money, but on a level playing field that is managed for the common good.

Having trouble understanding the issues around network neutrality? Here is a short video that explains it very clearly.

Swedish study says cellphones may create tumor risk

Submitted by acohill on Fri, 03/31/2006 - 12:58

A new Swedish study, via the Drudge Report, says that cellphones appear to raise the risk of brain tumors. People who appear to be at risk are those who have used cellphones for more than 2000 hours in their life, so the risk accumulates the longer that you use a cellphone. The researchers recommended hands-free use of cellphones to get them away from the head.

Cellphones use gigahertz radio frequencies that are also used in microwave ovens. Bluetooth wireless headsets also use gigahertz frequencies, so only wired headsets provide any protection.

Bloggers exempt from political rules

Submitted by acohill on Tue, 03/28/2006 - 09:33

Teh Federal Election Commission has clarified rules for political and campaign activity by exempting virtually all kinds of political speech on the Internet from the onerous rules that cover how campaign funds can be spent.

The rules, which surfaced last year, seemed to require onerous reporting by citizen bloggers if they even wrote about political candidates, and if they accepted campaign ads on their Web sites, it was worse. But occasionally government does the right thing.

Bloggers and their writing are much like the pamphleteers that were popular during the early days of the U.S. They are both citizen writers that generally derive little or no income from the activity. Imposing the same rules on bloggers that are required of professionally managed political campaigns made no sense administratively and even less sense in a free speech context.

Feds compromise with Google on search queries

Submitted by acohill on Mon, 03/20/2006 - 10:26

The Federal government has reached a compromise with Google on the government's request to Google to turn over a chunk of search queries. The Feds claim they need to see what people are searching for so that they can design better child pornography laws.

A federal judge has ordered Google to turn over the URLs (Web addresses) of some of the sites Google indexes, but not the search queries that people type in on the search engine.

Privacy advocates feel this is a reasonable compromise. I can agree with them in the narrow sense that it protects individual privacy rights better, but I still think the whole thing stinks. Since when does the federal government have the right to simply tell a privately owned business, "We want your data?" The only possible justification for a demand like that might be an issue of national security, but this particular demand is wrapped up in the politician's standard mantra, "It's for the kids."

Child pornography is horrendous, and those who traffic in it should be vigorously prosecuted. But surely someone in government is smart enough to figure out how to do that without trampling the rights of private businesses. This ruling sets a precedent--rest assured we will see the government trying to get the records and confidential information of other businesses in the future, on even more flimsy justification. Readers of this blog know that I am no fan of Google, but in this case, I think the company has gotten the short end of the stick.

Net Neutrality Defined

Submitted by acohill on Mon, 03/06/2006 - 09:11

Doc Searls, one of the tech community's best commentators on technology and its impact on us, has done an outstanding job of explaining network neutrality--what it is, why it has made the Internet successful, and why it needs to be preserved.

He also analyzes the broadband carriers and their dream to turn the Internet into a sophisticated form of cable TV. This is an article that deserves close attention. Here is just one of many key points:

"In fact, the asymmetrical build-outs of service to homes has done enormous harm to market growth by preventing countless small and home Net-based businesses from starting and growing.

Specifically, by provisioning big bandwidth downstream and narrow bandwidth upstream, while blocking ports 25 and 80--in crass violation of the Net's UNIX-derived network model, in addition to the end-to-end principle--the carriers prevent customers from running their own mail and Web servers and whatever server-based businesses might be possible. Again, all the carriers can imagine is Cable TV. That's been their fantasy from the beginning."

The end of network neutrality means the choking off of new engines of economic growth, especially in rural communities and underserved urban neighborhoods. Small businesses and entrepreneurs have been creating jobs at a furious rate over the past decade, fueled in large part by the Internet. If we lose the Internet as we know, to be replaced by glorified TV, communities and neighborhoods lose their future.

Read this article.

PCNA 2006: IP is a social contract

Submitted by acohill on Sat, 02/25/2006 - 10:55

Garth Graham is the visionary leader behind Telecommunities Canada; Graham has been thinking about communities and technology longer and with more clarity than most of us, and when Garth talks, I try to shut up and listen. In the hallway between PCNA sessions, I made a casual statement about how "technology is a tool." It's an innocuous phrase that has been uttered by millions of technocrats at one time or another.

But Graham looked me straight in the eyes and said, "Andrew, I have to disagree with you. IP is a social contract, not a tool."

The instant he said it, I knew it was true, and I realized I had missed an important piece of the puzzle. IP (Internet Protocol) is a relatively simple set of rules used by all the individual networks that comprise the "Internet." The IP rules work only because individual network operators have informally agreed to abide by them for the last twenty years or so--an informal social contract.

The alarming proposals for a multi-tiered Internet discard that social contract and replace it with business contracts between network access providers and content providers. Content users are left out completely.

As Garth said, "We can't let this happen." I agree.

Will the Internet be free or fee?

Submitted by acohill on Tue, 02/21/2006 - 10:16

Stephen Levy is a knowledgeable technology columnist for Newsweek, and his article on network neutrality is short and articulates the issues clearly. As Levy puts it, the Internet may end up with two classes of service: "steerage and first class," with nothing in between.

Such a split would stop the development of new services, and create de facto monopolies for the companies that are already big--think Google, AOL, Yahoo!, MSN. All four of those companies were tiny once, and the reason they were able to grow was because network neutrality allowed them to.

Once the Internet is split by access providers (the telephone and cable companies, for the most part) into free and fee-based classes of services, Levy, Vint Cerf (one of the original Internet developers), and many other believe innovation and competition will come to a halt.

What worries me is that there are too many calls for legislation. Do we really want Congress deciding how the Internet should be run? I don't think so.

The solution is to break the infrastructure stranglehold that the telephone and cable companies have over communities. Community infrastructure investments will not only get them to play by community rules, but as One Cleveland has shown, they can make money using community infrastructure.

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